How to rescue yourself from a meager retirement

A “combination of economic and demographic forces has left older Americans with bigger bills and less money to pay them.” According to the Wall Street Journal, Americans approaching retirement age face:

Stagnant incomes: Median incomes, including Social Security and retirement fund receipts, haven’t risen in years.

High debt: They are often paying off children’s educations and dipping into savings to help aging parents.

Paltry 401(k) retirement funds: The median income is under $8,000 a year for a household of two.

“What does a reduced lifestyle in retirement look like? It’s not pretty,” Pamela says. “You may have to work multiple low-wage jobs, give up things you now consider necessities, skip vacations and even haircuts. You may have to appeal to your children to help out.”

Social Security will “become depleted and unable to pay scheduled benefits in full on a timely basis in 2034,” according to the fund’s trustees. And many public-sector workers who expected a pension for life are living with uncertainty as cash-strapped governments consider pension cuts to cover their massive unfunded liabilities.

So what can you do about it? Pamela shares her 5-Step Plan to Protect Yourself:

Don’t put your head in the sand – that won’t make the problem go away.

Don’t rely too much on volatile, unpredictable government-sponsored retirement accounts for income in retirement. If you don’t know the minimum guaranteed value of your savings when you want to tap into them, you don’t have a plan – you’re gambling.

Don’t rely too much on Social Security or a public pension fund, for the reasons discussed above.